Pros and cons of the low dollar
Cherries will be cheaper overseas, but promotions will cost more.
Although the low value of the dollar is making U.S. goods seem like good value to overseas buyers, it's making it expensive to promote the products.
Keith Hu, international marketing director for Northwest Cherry Growers, said he expects to face two challenges in promoting cherries in international markets in the coming season: the advertising dollars won't go as far, and there could be a slowdown in the global economy. On the plus side, the cherries will seem cheaper to buyers.
The international promotions budget is set at $1.6 million. That's $400,000 less than last season, because federal Market Access Program funding is down, Hu said. Additional funding will depend on Congress passing the Farm Bill.
Northwest cherry promotions during 2008 will focus on the growth markets of China, Korea, Mexico, and some European countries. Hu said his strategy will be to do more in-store demonstrations and place less emphasis on public relations campaigns. An effort to provide education to retailers on handling and merchandising of cherries will continue. In Mexico, the aim will be to get importers and retailers working together to ensure a consistent supply of cherries.
In-store promotions are planned in Japan, which is the second-largest overseas market for Northwest cherries after Taiwan. A consumer contest on the theme "The Diamond of Fruit," offering diamonds as prizes, will run for a second season.
Promotions will continue with major retailers in Australia, but this might be the last year for Northwest cherry promotions in New Zealand, Hu said. Last season, fewer than 8,500 cases of Northwest cherries were shipped to New Zealand. Unless the volume increases significantly this season, promotions will end. Hu said obstacles to growth in that market are New Zealand's relatively small population and a requirement that the cherries be fumigated. The country has a population of only 4 million, which is far less than even one major city in Korea, Hu pointed out.
The Washington State Fruit Commission, which administers Northwest Cherry Growers, is allocating $2 million to promote cherries and soft fruits on the domestic market. Retail incentive programs are a major emphasis. Andrew Willis, the commission's promotions director, reported that last season's cherry incentive program resulted in a 40 percent increase in retailer advertising. The program aims to encourage retailers to continue to advertise cherries through July and early August, and will offer bonuses for advertising Rainier cherries.
Other aspects of the program include working with food editors and television food shows and publicizing the health benefits of eating cherries. The commission is also running a billboard campaign in five major U.S. cities.
The Fruit Commission's 2008–2009 budget is based on a potential crop of 16 million boxes of fresh cherries from the five member states of Northwest Cherry Growers, which are Washington, Oregon, Utah, Idaho, and Montana. The commission receives income from grants and from the Good Fruit Grower magazine, in addition to assessments on Northwest cherries and Washington stone fruits. The total budget for the year is $5.6 million.